Want to be an Impact Investor? Begin with Values

Over three-quarters of millennials see their investments as a way of expressing their social, political, and environmental values. This is part of a growing movement that sees financial decisions, alongside career and consumption choices, as a tool for social change. But to align our investments with our values, we must first take the time to figure out what those values are, and which tradeoffs we are willing to accept.

Judaism challenges us to live our lives to the highest moral standard. We are instructed to pursue peace (rodef shalom), seek justice (tzedek tirdof), love thy neighbor (v’ahavta l’reicha kamocha) and save lives (pikuach nefesh). We can and should strive every day in our actions to live by these values and the countless others enumerated for us in Jewish texts and traditions. But no one has the resources to support them all. We are forced to make tradeoffs, decide which to emphasize, and which values to prioritize.

Before you think about making an impact investment, you need to begin by defining and prioritizing what you value. Think about the following questions as you take the first steps to making value-aligned financial decisions:

1. What values are most important to you when making financial decisions?

First, identify a small set of values that are most important to you when making financial decisions. Think about values in terms of how you choose to live your life, what expectations you hold for others, and more broadly, what you hope to see in your communities or society as a whole. While values can be hard to come up with in a vacuum, a ready-made list of possible values, such as those offered by the Rose Community Foundation, can be a good place to start.

Once you have prioritized a small set of say five values, take some time to define them for yourself. For instance, Tikkun Olam, repairing the world, is very broad and can mean different things to different people. Does it mean standing up for those facing violence and oppression (Lo Ta’amod Al Dam Rei’echa) or helping to strengthen those less fortunate (V’hechezakta Bo)? Think through how your definition of the value may differ from someone else’s and what nuances you can tease out in determining its scope.

Reflect on how you narrowed down the list of values and what made you decide to choose these over others. Were there implicit beliefs or criteria you used to make these tradeoffs? See if a theme or pattern emerges across the values you prioritize.

2. How do these values connect to the issues you are passionate about?

Now that you’ve identified values that are important to you, think about the challenges in the world and identify a subset of issues you are most passionate about. As a starting point for exploration, you can use the United Nations’ Sustainable Development Goals , or the challenges facing the Jewish community around education, engagement, inclusivity, Israel, and affordability.

Did the values you identified earlier help guide your decision on which issues to choose? Did the issues you selected align with your prioritized values? If there is a disconnect between the values and issues you identified, try to isolate the value that is not being reflected or the goal that is out of place. This helps you test whether the values you prioritized are an accurate reflection of what is important to you when making financial decisions.

Next Steps

At LAVAN, we recognize that these are not easy or comfortable conversations to have. However, we also recognize that the first step to meaningful and successful impact investing is deriving a clear understanding of what we value and why. Furthermore, impact investing provides a welcome and necessary pause to our busy lives by asking important questions about who we are and what are our values.

Once you have identified what is important to you, the next step is exploring the impact investing landscape and determining which of the social challenges you chose can be addressed using market-based solutions. Only with clearly defined values as the foundation can we begin the exciting and challenging process of identifying the specific issues we want to tackle and the potential investment opportunities that address them.

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Laura is a Program Coordinator at LAVAN, a growing community of impact investors guided by Jewish learning to pursue social and environmental change. LAVAN trains new and existing impact investors, facilitates Jewish study and exploration of identity, and provides a platform for learning and collaboration.